1 00:00:02,720 --> 00:00:10,559 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,600 --> 00:00:14,560 Speaker 1: Bloomberg Intelligence podcast. Catch us live weekdays at ten am 3 00:00:14,600 --> 00:00:17,880 Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg 4 00:00:17,920 --> 00:00:21,040 Speaker 1: Business app. Listen on demand wherever you get your podcasts, 5 00:00:21,360 --> 00:00:23,520 Speaker 1: or watch us live on YouTube. 6 00:00:24,280 --> 00:00:27,479 Speaker 2: Let's check in with Vincent Gatza, senior equity research analyst 7 00:00:27,680 --> 00:00:32,080 Speaker 2: covering all the energy space for Bloomberg Intelligence. Hey, Vincent, 8 00:00:32,640 --> 00:00:35,640 Speaker 2: if you're a big oil company, like a Chevron, like 9 00:00:35,680 --> 00:00:38,840 Speaker 2: an exonmobile, you're waking up here in the past couple 10 00:00:38,840 --> 00:00:39,240 Speaker 2: of days. 11 00:00:39,840 --> 00:00:40,239 Speaker 3: How are you. 12 00:00:40,280 --> 00:00:43,080 Speaker 2: Viewing Venezuela these days as an investment opportunity? 13 00:00:43,080 --> 00:00:45,520 Speaker 4: If for you're one of these big oil companies, Well. 14 00:00:45,400 --> 00:00:48,920 Speaker 5: If you're a Chevron, you've been in country for almost 15 00:00:48,920 --> 00:00:52,720 Speaker 5: a century now, right, so you take a longer term view. 16 00:00:53,159 --> 00:00:58,720 Speaker 5: The assets have been renationalized and privatized and renationalized a 17 00:00:58,760 --> 00:01:02,480 Speaker 5: couple of times. Right, Chevron has been there, They've had 18 00:01:02,480 --> 00:01:07,120 Speaker 5: a foothold in that country throughout the more controversial times, 19 00:01:07,240 --> 00:01:11,319 Speaker 5: and so they are a direct beneficiary. But again, it's 20 00:01:11,360 --> 00:01:15,040 Speaker 5: going to take time. This isn't something that you know, 21 00:01:15,160 --> 00:01:19,640 Speaker 5: Although the military action didn't harm any of the facilities. 22 00:01:20,040 --> 00:01:23,640 Speaker 5: The facilities have been in decay and have been under 23 00:01:23,680 --> 00:01:27,760 Speaker 5: invested in for several years throughout the nation, So this 24 00:01:27,920 --> 00:01:31,320 Speaker 5: is going to be a slow grind higher. You know, 25 00:01:31,400 --> 00:01:35,440 Speaker 5: think about that the nation was producing more than three 26 00:01:35,520 --> 00:01:39,759 Speaker 5: million barrels a day at its prior peak, and that 27 00:01:39,840 --> 00:01:42,560 Speaker 5: peak was sometime in the seventies, and it was right 28 00:01:42,600 --> 00:01:46,520 Speaker 5: around three million and two in the early knots before 29 00:01:46,640 --> 00:01:50,720 Speaker 5: it was nationalized. They're somewhere around a million barrels a 30 00:01:50,800 --> 00:01:53,400 Speaker 5: day now, So it's going to take a lot of 31 00:01:53,440 --> 00:01:55,840 Speaker 5: time and a lot of investment to get back to that. 32 00:01:55,960 --> 00:01:59,720 Speaker 5: So we shouldn't be jumping the gun here, but eventually, yes, 33 00:02:00,120 --> 00:02:04,960 Speaker 5: when you think about where those flows are headed, the 34 00:02:05,040 --> 00:02:10,240 Speaker 5: one one major beneficiary, the one group that will likely 35 00:02:10,440 --> 00:02:14,320 Speaker 5: benefit the most is really the US Gulf Coast refining 36 00:02:14,400 --> 00:02:19,200 Speaker 5: sector because of their slate, because of what barrels that 37 00:02:19,240 --> 00:02:25,320 Speaker 5: they need to maximize their refining capacity. So in the US, 38 00:02:25,800 --> 00:02:30,600 Speaker 5: the refining slate is really geared toward the heavier barrels 39 00:02:30,600 --> 00:02:35,160 Speaker 5: that are produced in Venezuela and also in other parts 40 00:02:35,160 --> 00:02:39,239 Speaker 5: of Latin America. So what this will do it will 41 00:02:39,560 --> 00:02:43,880 Speaker 5: put pressure on that light heavy differential. It will bring 42 00:02:44,120 --> 00:02:48,799 Speaker 5: heavy barrel prices down and it will benefit the margins 43 00:02:48,800 --> 00:02:55,320 Speaker 5: of the refiners. Chevron and Exxon also have refining capacity, 44 00:02:55,440 --> 00:02:59,480 Speaker 5: cocher and hydrocracker capacity along the Gulf Coast and they 45 00:02:59,480 --> 00:03:03,800 Speaker 5: will benefit eventually. This isn't something that's going to happen tomorrow, 46 00:03:03,919 --> 00:03:06,880 Speaker 5: next week, maybe not even next year, but over time 47 00:03:07,800 --> 00:03:12,839 Speaker 5: we see those margins improving as that differential widens out 48 00:03:13,120 --> 00:03:14,959 Speaker 5: with pressure on the heavy barrels. 49 00:03:15,000 --> 00:03:18,079 Speaker 6: Okay, so you say the Gulf Coast refiners certainly benefit. 50 00:03:19,000 --> 00:03:22,399 Speaker 6: The ones that don't benefit seem to be some Canadian 51 00:03:22,440 --> 00:03:25,680 Speaker 6: oil sands companies which also produce heavy crude. We're seeing 52 00:03:25,720 --> 00:03:30,200 Speaker 6: declines in Canadian natural Resources, Sonovas Energy, and Suncore Energy. 53 00:03:30,480 --> 00:03:32,200 Speaker 6: Is that just a knee jerk reaction or is there 54 00:03:32,200 --> 00:03:33,000 Speaker 6: something more to this? 55 00:03:33,880 --> 00:03:38,760 Speaker 5: No, Eventually you'll see pressure on those barrels because once 56 00:03:38,800 --> 00:03:42,560 Speaker 5: you have more flow coming from Venezuela, it'll put price 57 00:03:42,640 --> 00:03:47,360 Speaker 5: pressure on those barrels from the Canadian oil sands down 58 00:03:47,560 --> 00:03:52,600 Speaker 5: into the US. And so more supply means price pressure, 59 00:03:52,640 --> 00:03:58,840 Speaker 5: and so there will be a steady bleed south of 60 00:03:59,280 --> 00:04:04,600 Speaker 5: those prices as more flows come from Venezuela. Eventually, once 61 00:04:04,680 --> 00:04:08,480 Speaker 5: that's lot, once that is unlocked. It's going to take time, 62 00:04:08,840 --> 00:04:14,120 Speaker 5: but I think the losers there would be those heavier 63 00:04:14,120 --> 00:04:16,120 Speaker 5: barrels coming from our neighbors up north. 64 00:04:17,600 --> 00:04:20,680 Speaker 4: Stay with us. More from Bloomberg Intelligence coming up after this. 65 00:04:24,320 --> 00:04:28,000 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 66 00:04:28,080 --> 00:04:31,479 Speaker 1: weekdays at ten am Eastern on Applecarclay, and Android Auto 67 00:04:31,560 --> 00:04:34,640 Speaker 1: with the Bloomberg Business app. Listen on demand wherever you 68 00:04:34,680 --> 00:04:38,039 Speaker 1: get your podcasts, or watch us live on YouTube. 69 00:04:38,520 --> 00:04:41,440 Speaker 2: One of the most read stories on the Bloomberg Terminal 70 00:04:41,560 --> 00:04:44,840 Speaker 2: today starts with this lead paragraph. The US raid that 71 00:04:44,880 --> 00:04:49,040 Speaker 2: captured Venezuelan President Nicholas Munduro put America's allies and adversars 72 00:04:49,120 --> 00:04:53,400 Speaker 2: on notice. President Trump has a new world order of 73 00:04:53,560 --> 00:04:56,159 Speaker 2: his own, and obviously that may have implications for a 74 00:04:56,160 --> 00:04:59,719 Speaker 2: lot of different parts of the marketplace and different industries 75 00:04:59,720 --> 00:05:03,480 Speaker 2: out there, one of them being aerospace, defense, airlines. 76 00:05:03,560 --> 00:05:04,240 Speaker 4: Let's get the latest. 77 00:05:04,279 --> 00:05:06,640 Speaker 2: There were joined by Will Leae, airspace and defense analysts 78 00:05:06,680 --> 00:05:10,440 Speaker 2: Bloomberg Intelligence, and George Ferson, senior Aerospace, defense and airlines analysts. 79 00:05:10,560 --> 00:05:13,080 Speaker 2: George is down in Princeton. We've got Will here in 80 00:05:13,160 --> 00:05:16,160 Speaker 2: our New York studios. Will, I'll start with you. You've covered 81 00:05:16,200 --> 00:05:19,960 Speaker 2: the defense companies for a long time. Here are they 82 00:05:20,040 --> 00:05:22,880 Speaker 2: sensing that there might be a new world order in 83 00:05:22,960 --> 00:05:26,360 Speaker 2: one that even though President Trump ran on the you 84 00:05:26,360 --> 00:05:29,320 Speaker 2: know the the his campaign said We're not going to 85 00:05:29,400 --> 00:05:31,400 Speaker 2: get in any of those wars outside of the US. 86 00:05:31,440 --> 00:05:34,360 Speaker 2: We're not gonna bother, but sure we have What did 87 00:05:34,360 --> 00:05:35,799 Speaker 2: the defense contractors say. 88 00:05:36,480 --> 00:05:39,320 Speaker 7: In terms of looking at the reaction with the stock 89 00:05:40,000 --> 00:05:43,960 Speaker 7: performance of the US contractors versus the Europeans, it seems 90 00:05:44,000 --> 00:05:48,640 Speaker 7: that the Trump ammurtiation, this the Venezuela's strike was off 91 00:05:49,160 --> 00:05:52,400 Speaker 7: was a limited military action. It was an is an 92 00:05:52,440 --> 00:05:57,920 Speaker 7: increase expansion in a military role in nation building. This 93 00:05:57,960 --> 00:06:01,919 Speaker 7: is more say, a long enforcement action. And so a 94 00:06:01,960 --> 00:06:05,000 Speaker 7: lot of the assets that we're being used to execute 95 00:06:05,200 --> 00:06:09,400 Speaker 7: operation absolutely itself is something that has been or will 96 00:06:09,400 --> 00:06:12,320 Speaker 7: be used for the Asia Pacific pivot in terms of 97 00:06:12,360 --> 00:06:15,400 Speaker 7: the shipbuilding, in terms of the need for more manned 98 00:06:15,400 --> 00:06:19,880 Speaker 7: aircraft and precision and long race strike low race strike munitions. 99 00:06:21,320 --> 00:06:24,200 Speaker 2: George he served in Iraq as an army intelligence officer 100 00:06:24,240 --> 00:06:25,960 Speaker 2: in two thousand and three, So you kind of know 101 00:06:26,000 --> 00:06:29,000 Speaker 2: that back how this all these operations kind of get 102 00:06:29,040 --> 00:06:31,520 Speaker 2: planned out, executed Georgian and it looked like the US 103 00:06:31,520 --> 00:06:36,280 Speaker 2: military performed extraordinarily. Well here, you what are you sensing 104 00:06:36,320 --> 00:06:39,960 Speaker 2: in terms of any difference about how the military folks 105 00:06:40,000 --> 00:06:41,880 Speaker 2: are thinking about their role here, because it looks like 106 00:06:41,880 --> 00:06:43,480 Speaker 2: the focus is going to be changing and focusing a 107 00:06:43,520 --> 00:06:45,400 Speaker 2: little bit more on this hemisphere. 108 00:06:47,120 --> 00:06:50,240 Speaker 8: Yeah. So, I mean, I think that, you know, we've 109 00:06:50,320 --> 00:06:53,279 Speaker 8: kind of seen the Chinese and the Russians make some 110 00:06:53,360 --> 00:06:57,960 Speaker 8: inroads in Latin America. You know, specifically they were involved 111 00:06:58,000 --> 00:07:01,880 Speaker 8: in military supply and Venezuela as well as taking some 112 00:07:01,920 --> 00:07:03,960 Speaker 8: of the oil out of the air. And so I'm 113 00:07:03,960 --> 00:07:07,600 Speaker 8: gonna I think that the Trump administration is turning back 114 00:07:07,680 --> 00:07:13,240 Speaker 8: towards the Gulf of America, the Gulf of Mexico whatever 115 00:07:13,240 --> 00:07:16,360 Speaker 8: we would call it in Latin America and saying, hey, 116 00:07:16,400 --> 00:07:20,280 Speaker 8: this is this is an area where we're gonna be 117 00:07:20,400 --> 00:07:24,160 Speaker 8: the prime, primary influencer. We don't need you know, sort 118 00:07:24,200 --> 00:07:28,480 Speaker 8: of Russian and Chinese medaling around here. And and so 119 00:07:28,560 --> 00:07:34,520 Speaker 8: I think you're gonna see you know, more military I don't, 120 00:07:34,520 --> 00:07:36,480 Speaker 8: I don't want to say action, but at least more 121 00:07:36,520 --> 00:07:41,520 Speaker 8: military presence around the region. As Will said, though, look, 122 00:07:41,560 --> 00:07:44,120 Speaker 8: I mean, I think you know, as we would as 123 00:07:44,160 --> 00:07:46,360 Speaker 8: we look at the Pentagon. We look at the fence stocks. 124 00:07:46,720 --> 00:07:48,760 Speaker 8: We always think of what the pacing thread is, and 125 00:07:48,800 --> 00:07:53,320 Speaker 8: the pacing thread is who's the Pentagon focusing on as 126 00:07:53,320 --> 00:07:56,880 Speaker 8: they build their capabilities and train their soldiers and think 127 00:07:56,920 --> 00:07:59,800 Speaker 8: about where the risk is of a of a major 128 00:08:00,280 --> 00:08:03,440 Speaker 8: conflagration here in the future. And that pacing threat I 129 00:08:03,440 --> 00:08:06,640 Speaker 8: think still is China. And so you're gonna still see 130 00:08:06,680 --> 00:08:10,560 Speaker 8: the majority of the money spent on systems that are 131 00:08:10,600 --> 00:08:14,800 Speaker 8: needed in Asia to project power. But yeah, I think 132 00:08:14,800 --> 00:08:18,760 Speaker 8: you may find again US forces hanging around, you know, 133 00:08:18,840 --> 00:08:21,640 Speaker 8: our southern neighbors a little more than maybe some of 134 00:08:21,680 --> 00:08:23,360 Speaker 8: them expected when they joined the military. 135 00:08:24,400 --> 00:08:27,160 Speaker 2: Hey, well, talk to us about just the environment for 136 00:08:27,240 --> 00:08:30,040 Speaker 2: defense spending. How the last couple of budgets been. How's 137 00:08:30,080 --> 00:08:33,040 Speaker 2: the upcoming budget look? I mean, is the US military 138 00:08:33,080 --> 00:08:34,520 Speaker 2: still getting what it needs? 139 00:08:34,960 --> 00:08:35,160 Speaker 9: Yeah? 140 00:08:35,240 --> 00:08:37,600 Speaker 7: So I would say that with a fiscal twenty six budget, 141 00:08:37,679 --> 00:08:40,080 Speaker 7: it was a little up of anomaly because you have 142 00:08:40,120 --> 00:08:44,440 Speaker 7: to map that large reconciliation bill that was passed last 143 00:08:44,520 --> 00:08:47,000 Speaker 7: year that added about one hundred and thirteen billion dollars 144 00:08:47,040 --> 00:08:49,880 Speaker 7: to the overall defense spending. But generally we see that 145 00:08:49,880 --> 00:08:54,400 Speaker 7: the defense spending will probably rise gradually, not anything that's 146 00:08:54,440 --> 00:08:56,360 Speaker 7: going to be a step funshit increase like what we 147 00:08:56,400 --> 00:08:59,880 Speaker 7: saw with the twenty six budget, so something along the 148 00:09:00,240 --> 00:09:03,719 Speaker 7: so maybe around one trillion dollars, which is two to 149 00:09:03,760 --> 00:09:05,400 Speaker 7: three percent increase from this year. 150 00:09:06,520 --> 00:09:09,920 Speaker 2: George, So, going back to kind of the hot spot 151 00:09:10,000 --> 00:09:13,040 Speaker 2: areas of the world here, do you feel like our defense, 152 00:09:13,120 --> 00:09:16,520 Speaker 2: our military, if one can make an argument, it just feels. 153 00:09:16,160 --> 00:09:17,640 Speaker 4: Like it's being stretched so thin. 154 00:09:17,679 --> 00:09:20,920 Speaker 2: There's stuff going on obviously in the Ukraine, so you've 155 00:09:20,920 --> 00:09:22,840 Speaker 2: got to keep your focus on Europe. We've got the 156 00:09:22,840 --> 00:09:27,000 Speaker 2: Middle East of course, China as you mentioned earlier, and 157 00:09:27,040 --> 00:09:30,199 Speaker 2: now you know, kind of Latin America here. Is there 158 00:09:30,200 --> 00:09:33,480 Speaker 2: a concern when you talk to folks within the industry 159 00:09:33,480 --> 00:09:36,120 Speaker 2: that maybe this military is getting stretched a little thin here? 160 00:09:37,120 --> 00:09:40,880 Speaker 8: Yeah, I mean I think there's always that concern. And 161 00:09:40,960 --> 00:09:43,400 Speaker 8: I mean the US military, you know, it continues to 162 00:09:43,440 --> 00:09:46,640 Speaker 8: be I think in the of the free nations around 163 00:09:46,679 --> 00:09:49,400 Speaker 8: the world, it's the largest, it's the most capable, as 164 00:09:49,400 --> 00:09:51,880 Speaker 8: we saw, but it also gets you know a lot 165 00:09:51,880 --> 00:09:54,079 Speaker 8: of a lot of missions get pushed upon it to do, 166 00:09:54,840 --> 00:09:59,000 Speaker 8: so it's always sort of stretched too thin. I just 167 00:09:59,120 --> 00:10:01,400 Speaker 8: you know, I I think that's part of a discussion 168 00:10:01,400 --> 00:10:04,559 Speaker 8: that that Trump is having with Europe right now. It's 169 00:10:04,600 --> 00:10:08,240 Speaker 8: not always conducted, maybe the most elegantly, But I think 170 00:10:08,280 --> 00:10:12,360 Speaker 8: part of the discussion is you're a big economic block. 171 00:10:12,400 --> 00:10:14,440 Speaker 8: You have a lot of GDP strength behind you, about 172 00:10:14,480 --> 00:10:17,359 Speaker 8: eighty percent of what the US has, yet your military 173 00:10:17,920 --> 00:10:21,320 Speaker 8: is almost nothing, yep, and we really need you to 174 00:10:21,400 --> 00:10:24,240 Speaker 8: sort of step up, step up not only your manpower 175 00:10:24,800 --> 00:10:28,559 Speaker 8: but your capabilities, you know, step up your buive equipment, 176 00:10:29,000 --> 00:10:33,680 Speaker 8: high end equipment, and invest in technology so you can 177 00:10:34,400 --> 00:10:37,679 Speaker 8: bear some of the burden that we have managing all 178 00:10:37,720 --> 00:10:40,600 Speaker 8: these challenges around the world. So it's certainly stretched too thin. 179 00:10:41,040 --> 00:10:43,640 Speaker 8: I think we're hoping allies will come into the game more. 180 00:10:44,480 --> 00:10:47,640 Speaker 4: Stay with us. More from Bloomberg Intelligence coming up after this. 181 00:10:51,480 --> 00:10:55,160 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 182 00:10:55,240 --> 00:10:58,320 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 183 00:10:58,360 --> 00:11:01,800 Speaker 1: Auto with the Bloomberg Business Listen on demand wherever you 184 00:11:01,840 --> 00:11:05,199 Speaker 1: get your podcasts, or watch us live on YouTube. 185 00:11:05,559 --> 00:11:07,640 Speaker 2: I guess one of the lessons we all learned from 186 00:11:07,720 --> 00:11:10,240 Speaker 2: Iraq was if you break it, you own it. And 187 00:11:10,280 --> 00:11:11,800 Speaker 2: that's why I think it's leading a lot of folks 188 00:11:11,880 --> 00:11:14,960 Speaker 2: to ask the question today. Okay, Moduro is out as 189 00:11:15,080 --> 00:11:17,320 Speaker 2: leader of Venezuela, and most people agree that's a good 190 00:11:17,360 --> 00:11:19,839 Speaker 2: thing in and of itself, and now. 191 00:11:19,880 --> 00:11:21,920 Speaker 4: What's the policy going for it? So let's talk to 192 00:11:21,960 --> 00:11:23,720 Speaker 4: some smart people about this coming up. 193 00:11:23,920 --> 00:11:26,920 Speaker 2: Aaron David Miller, Senior Fellow at the Carnegie Endowment for 194 00:11:27,040 --> 00:11:29,360 Speaker 2: International Piece down in Washington, DC. 195 00:11:30,040 --> 00:11:31,319 Speaker 4: Aaron, what did you make of the. 196 00:11:31,280 --> 00:11:34,560 Speaker 2: News over the weekend out of Venezuela. 197 00:11:35,960 --> 00:11:39,040 Speaker 9: Thanks for having me, Paul and Scarlet. I don't know 198 00:11:39,040 --> 00:11:42,400 Speaker 9: about you, guys. I have more questions than than answers. 199 00:11:43,160 --> 00:11:46,640 Speaker 9: I worked for Rebublicans and Democrats voted for them. Jimmy 200 00:11:46,640 --> 00:11:49,480 Speaker 9: Carter Bush forty three. It just seems to me that 201 00:11:49,520 --> 00:11:52,240 Speaker 9: when US deploys its forces abroad and needs to ask 202 00:11:52,320 --> 00:11:56,839 Speaker 9: some pretty basic questions, not just can we, but should we? 203 00:11:57,320 --> 00:12:00,200 Speaker 9: What's next? And what's it going to cost? And I think, think, 204 00:12:00,280 --> 00:12:03,600 Speaker 9: what we know almost seventy two hours into this is 205 00:12:03,600 --> 00:12:05,880 Speaker 9: that a very bad man, a bad actor, and his 206 00:12:05,960 --> 00:12:09,760 Speaker 9: wife have been taken offline. The US military has demonstrated 207 00:12:09,800 --> 00:12:16,280 Speaker 9: a tactical brilliance extraordinary, an extraordinary complex set of circumstances. 208 00:12:17,600 --> 00:12:20,520 Speaker 9: Beyond that, it's hard for me to understand what the 209 00:12:20,640 --> 00:12:25,520 Speaker 9: Administration's end goals here? Is it a control loyal and 210 00:12:25,600 --> 00:12:30,040 Speaker 9: oil to produce a regime that's stable, not caring whether 211 00:12:30,040 --> 00:12:33,120 Speaker 9: it's democratic or not. And then how does the United 212 00:12:33,160 --> 00:12:35,920 Speaker 9: States and a country roughly what twice the size of 213 00:12:36,040 --> 00:12:39,600 Speaker 9: California with thirty one million people embassy has been closed 214 00:12:39,600 --> 00:12:43,200 Speaker 9: there since twenty nineteen, How does the Terman administration make 215 00:12:43,240 --> 00:12:49,040 Speaker 9: its impact and its influence on internal Venezuelan politics felt? 216 00:12:49,160 --> 00:12:53,080 Speaker 9: And how does it bend the Maduro Light government to 217 00:12:53,200 --> 00:12:56,560 Speaker 9: its will? Those are the core questions I've got this morning. 218 00:12:56,800 --> 00:12:59,600 Speaker 6: Yeah, and these are great questions to pose. They feel 219 00:12:59,679 --> 00:13:03,600 Speaker 6: unabas miserable right now, erin because we don't know how 220 00:13:03,640 --> 00:13:06,640 Speaker 6: it's all going to play out if you were running 221 00:13:06,679 --> 00:13:10,800 Speaker 6: a neighboring country of Venezuela. What does this mean for Cuba, 222 00:13:10,880 --> 00:13:13,600 Speaker 6: for Columbia, because the president seemed to imply that they 223 00:13:13,600 --> 00:13:14,479 Speaker 6: were next. 224 00:13:14,720 --> 00:13:15,840 Speaker 3: On his target list. 225 00:13:16,320 --> 00:13:20,680 Speaker 9: Well, they're bad actors, certainly on the Trumpet administration list, 226 00:13:21,280 --> 00:13:24,480 Speaker 9: it's always Greenland, or at least the Danes, who, when 227 00:13:24,480 --> 00:13:28,800 Speaker 9: the presidents view, really shouldn't be in control of Greenland. 228 00:13:29,600 --> 00:13:33,280 Speaker 9: I think, Look that the Columbians already come against this 229 00:13:33,440 --> 00:13:37,720 Speaker 9: pretty strong. So is the Cubans eighty people, civilians and 230 00:13:37,800 --> 00:13:42,240 Speaker 9: military were killed in this operation. Press is reporting the 231 00:13:42,320 --> 00:13:47,040 Speaker 9: thirty two of the eighty were Cuban security of personnel. 232 00:13:47,440 --> 00:13:51,680 Speaker 9: So I think one of the demands I suspected the 233 00:13:51,679 --> 00:13:56,080 Speaker 9: trumpetministration as it deals with this Maduro light government headed 234 00:13:56,120 --> 00:14:00,320 Speaker 9: by right now the acting President Elsea Rodriguez, is to 235 00:14:00,400 --> 00:14:04,840 Speaker 9: basically get this government to break its ties not just 236 00:14:04,880 --> 00:14:10,520 Speaker 9: to Cuba, but to stop exporting oil to China, to 237 00:14:10,640 --> 00:14:17,040 Speaker 9: Russia and to Iran. Russians are already concerned about this, 238 00:14:17,400 --> 00:14:21,520 Speaker 9: convinced that if the Americans control the largest proven oil 239 00:14:21,840 --> 00:14:23,880 Speaker 9: is in the world, that they will flood the market 240 00:14:23,960 --> 00:14:27,680 Speaker 9: and the price of Russian who is going to drop. 241 00:14:27,760 --> 00:14:30,480 Speaker 9: So there are a lot of echoes and ripples here, 242 00:14:30,560 --> 00:14:33,320 Speaker 9: But for the moment, I think the real core question 243 00:14:33,560 --> 00:14:39,760 Speaker 9: is who exactly is the administration going to work with 244 00:14:40,360 --> 00:14:43,960 Speaker 9: in order to accomplish its goals in Venezuela, And right 245 00:14:44,000 --> 00:14:49,920 Speaker 9: now it seems to me they're banking on stability and 246 00:14:50,680 --> 00:14:54,680 Speaker 9: prepared to work with the remnants of Maduro's government. If 247 00:14:54,680 --> 00:14:57,560 Speaker 9: that is in fact the case, then I think the 248 00:14:57,600 --> 00:14:59,640 Speaker 9: lift is going to be a lot harder. The Venezuelan 249 00:14:59,720 --> 00:15:02,280 Speaker 9: milit terry has not spoken, but they've got about one 250 00:15:02,360 --> 00:15:06,160 Speaker 9: hundred and twenty three thousand total forces. They've been humiliated 251 00:15:06,240 --> 00:15:09,040 Speaker 9: by the US military. They can't be happy about this, 252 00:15:09,480 --> 00:15:13,480 Speaker 9: and they're probably relieved in the sense that the president 253 00:15:13,560 --> 00:15:18,120 Speaker 9: has all but dissed the Nobel Prize winner. Every Machado 254 00:15:19,320 --> 00:15:23,080 Speaker 9: probably the most popular of Venezuelan politician in the country today. 255 00:15:23,160 --> 00:15:26,720 Speaker 9: So again, a lot of questions probably should have been 256 00:15:26,760 --> 00:15:34,200 Speaker 9: asked before Grant. Yeah, day one, but it's all going 257 00:15:34,240 --> 00:15:36,800 Speaker 9: to come out in the wash. Whether it's positive or 258 00:15:36,880 --> 00:15:38,280 Speaker 9: negative remains to be seen. 259 00:15:38,480 --> 00:15:40,560 Speaker 2: Aaron about thirty seconds left. What do we know about 260 00:15:40,560 --> 00:15:45,480 Speaker 2: the existing situation in Venezuela. Can this government keep it 261 00:15:45,520 --> 00:15:47,520 Speaker 2: together or is it do we run the risk of 262 00:15:48,240 --> 00:15:49,920 Speaker 2: some type of task ensuing. 263 00:15:50,240 --> 00:15:52,960 Speaker 9: You know, a borrow a line from Sam Adams in 264 00:15:53,040 --> 00:15:57,240 Speaker 9: Our Revolution when he said, basically in reference to the British, 265 00:15:57,280 --> 00:16:00,360 Speaker 9: where they're going to hang together or hang separately? Seemed 266 00:16:00,360 --> 00:16:03,880 Speaker 9: to me that the Maduro government, which administration has described 267 00:16:03,880 --> 00:16:08,000 Speaker 9: as literally a crime syndicate, has a stake in trying 268 00:16:08,040 --> 00:16:11,000 Speaker 9: to maintain a degree of cohesion. To see exactly how 269 00:16:11,040 --> 00:16:13,360 Speaker 9: the United States, What kind of pressure is the United 270 00:16:13,400 --> 00:16:17,200 Speaker 9: States going to bring and can the acting President Elsea Roder, 271 00:16:17,280 --> 00:16:21,360 Speaker 9: You guys keep her feet in both camps, pleasing than 272 00:16:21,360 --> 00:16:24,840 Speaker 9: Trump administration on one hand, but also keeping her ties 273 00:16:24,960 --> 00:16:27,600 Speaker 9: with the current regime. 274 00:16:28,480 --> 00:16:31,560 Speaker 4: Stay with us. More from Bloomberg Intelligence coming up after this. 275 00:16:35,520 --> 00:16:39,240 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us Live 276 00:16:39,320 --> 00:16:42,360 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 277 00:16:42,400 --> 00:16:45,720 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 278 00:16:45,760 --> 00:16:48,880 Speaker 1: you get your podcasts, or watch us live on YouTube. 279 00:16:49,600 --> 00:16:52,160 Speaker 2: Let's check out with Edward Price, non resident Senior Fellow 280 00:16:52,160 --> 00:16:53,400 Speaker 2: at NYU and. 281 00:16:54,160 --> 00:16:58,840 Speaker 4: President Trump certainly made good on his strong rhetoric. 282 00:16:59,160 --> 00:17:02,800 Speaker 2: Really over the last several months as it relates to Venezuela. 283 00:17:03,280 --> 00:17:05,320 Speaker 2: What's your view now that we've had a little bit 284 00:17:05,320 --> 00:17:09,600 Speaker 2: of time to digest this news here, Paul So, On the. 285 00:17:09,560 --> 00:17:11,960 Speaker 10: One hand, it's a very very good thing that the 286 00:17:12,080 --> 00:17:15,560 Speaker 10: United States has the power and the reach to monitor 287 00:17:15,840 --> 00:17:19,280 Speaker 10: and seize drug dealers and bad guys, even if those 288 00:17:19,320 --> 00:17:21,879 Speaker 10: bad guys happen also to have a side hustle as 289 00:17:21,920 --> 00:17:24,640 Speaker 10: the president of a sovereign country. On the other hand, 290 00:17:24,680 --> 00:17:26,640 Speaker 10: it could prove in the long run to be a 291 00:17:26,720 --> 00:17:30,000 Speaker 10: bad thing that any power seizes the president of any 292 00:17:30,040 --> 00:17:32,879 Speaker 10: other power, even if that president is also a drug dealer. 293 00:17:33,040 --> 00:17:35,560 Speaker 10: And this is a net calculation that we will not 294 00:17:35,680 --> 00:17:38,639 Speaker 10: know the full effects of as people who watch you 295 00:17:38,880 --> 00:17:42,119 Speaker 10: monitor the situation, as the phrase goes, and watch history 296 00:17:42,119 --> 00:17:44,960 Speaker 10: in real time, probably for another twenty years. And that 297 00:17:45,040 --> 00:17:47,680 Speaker 10: is another way of saying that maybe other powers elsewhere 298 00:17:47,720 --> 00:17:51,120 Speaker 10: in the world will decide to follow this example that said, 299 00:17:51,119 --> 00:17:53,800 Speaker 10: they don't quite have the capability we did. And I'm 300 00:17:53,880 --> 00:17:55,960 Speaker 10: very heartened to see that the United States can still 301 00:17:55,960 --> 00:17:56,920 Speaker 10: pull this kind of thing off. 302 00:17:57,560 --> 00:17:59,480 Speaker 3: We can pull it off, but then what happens. 303 00:18:00,000 --> 00:18:03,480 Speaker 6: We've heard the president talk about how we'll run Venezuela 304 00:18:03,640 --> 00:18:08,400 Speaker 6: and the new president Dlcia Rodriguez acting president who's been 305 00:18:08,480 --> 00:18:09,720 Speaker 6: sworn in, would. 306 00:18:09,520 --> 00:18:10,760 Speaker 3: Work alongside the US. 307 00:18:10,800 --> 00:18:12,960 Speaker 6: What does that mean from where you sit, that the 308 00:18:13,080 --> 00:18:15,480 Speaker 6: US will run Venezuela. 309 00:18:15,520 --> 00:18:17,720 Speaker 10: I think it matters more what it means from where 310 00:18:17,720 --> 00:18:21,240 Speaker 10: the Venezuelans sit. And it could be that the remnants 311 00:18:21,320 --> 00:18:25,600 Speaker 10: of the Maduro regime do in fact comply scene as 312 00:18:25,640 --> 00:18:27,240 Speaker 10: that they're facing the barrel of a gun. It might 313 00:18:27,320 --> 00:18:29,320 Speaker 10: be that they get on board. And let's not forget 314 00:18:29,320 --> 00:18:32,399 Speaker 10: that Madua himself offered some kind of deal on the 315 00:18:32,400 --> 00:18:35,360 Speaker 10: oil industry, on the energy industry. But on the other hand, 316 00:18:35,359 --> 00:18:38,520 Speaker 10: we don't know what run Venezuela means. It could be 317 00:18:38,560 --> 00:18:42,000 Speaker 10: that Venezuela ends up in some kind of further or 318 00:18:42,080 --> 00:18:45,439 Speaker 10: extended civil collapse. The economy has lost about three quarters 319 00:18:45,440 --> 00:18:48,440 Speaker 10: of its GDP in recent years. Its total energy production 320 00:18:48,520 --> 00:18:52,720 Speaker 10: has been down annualized eight percent between twenty eleven and 321 00:18:52,720 --> 00:18:54,919 Speaker 10: twenty twenty one, so it's already more or less on 322 00:18:54,920 --> 00:18:57,560 Speaker 10: its knees. And I would suggest that we're at something 323 00:18:57,560 --> 00:18:58,360 Speaker 10: of a fork in the road. 324 00:18:58,440 --> 00:19:02,600 Speaker 2: Yeah, what do you think next steps are likely to 325 00:19:02,640 --> 00:19:05,840 Speaker 2: be here in Venezuela, Because I guess what we all 326 00:19:05,880 --> 00:19:08,720 Speaker 2: want to avoid is something where the US and its 327 00:19:08,760 --> 00:19:10,800 Speaker 2: resources really need to get involved here. 328 00:19:10,800 --> 00:19:11,960 Speaker 4: How do you think this might play out? 329 00:19:13,800 --> 00:19:13,960 Speaker 5: Well? 330 00:19:13,960 --> 00:19:17,480 Speaker 10: Again, as I say this is a widespread my money 331 00:19:17,480 --> 00:19:20,760 Speaker 10: would be on the Venezuelans getting in line. Broadly, the 332 00:19:20,840 --> 00:19:25,000 Speaker 10: United States has demonstrated an incredible capability, and part of 333 00:19:25,040 --> 00:19:26,840 Speaker 10: the reason that we had our fleet there for sol On, 334 00:19:26,920 --> 00:19:29,840 Speaker 10: I imagine, was to get people to think in Venezuela 335 00:19:29,960 --> 00:19:32,080 Speaker 10: about whether or not they actually wanted us to put 336 00:19:32,080 --> 00:19:34,520 Speaker 10: boots on the ground or continue with a second wave 337 00:19:34,920 --> 00:19:37,240 Speaker 10: military strike. And I would add in as well. But 338 00:19:37,480 --> 00:19:40,880 Speaker 10: it's important to look at what Venezuelans think, and Venezuelan's 339 00:19:40,880 --> 00:19:44,439 Speaker 10: around the world, and also in Venezuela do seem to 340 00:19:44,480 --> 00:19:47,879 Speaker 10: be very pleased that Maduro is gone. Maduro was and 341 00:19:48,080 --> 00:19:50,439 Speaker 10: is a bad guy. We're going to find out just 342 00:19:50,480 --> 00:19:53,480 Speaker 10: how bad at noon and in the coming weeks, no doubt. 343 00:19:53,920 --> 00:19:58,000 Speaker 10: So I think the Venezuelans will probably welcome this liberation, 344 00:19:58,119 --> 00:20:03,200 Speaker 10: if you like. Albeit there are within Venezuela and within Colombia, 345 00:20:03,200 --> 00:20:05,879 Speaker 10: and of course within Cuba and Russia that would probably 346 00:20:05,880 --> 00:20:07,160 Speaker 10: want to see something else go down. 347 00:20:08,119 --> 00:20:09,600 Speaker 3: Well, let's talk a little bit about Russia. 348 00:20:09,640 --> 00:20:14,200 Speaker 6: But in the context of whether this Austin gives putin 349 00:20:14,240 --> 00:20:17,240 Speaker 6: the green light to renew efforts to topple Vladimir's Zelensky, 350 00:20:17,359 --> 00:20:21,400 Speaker 6: whether China can push forward with removing Taiwan's president. 351 00:20:22,720 --> 00:20:25,160 Speaker 10: So this is the multi billion dollar question. I think 352 00:20:25,880 --> 00:20:29,600 Speaker 10: the Secretary of State markar Rubio has put forward the 353 00:20:29,600 --> 00:20:32,680 Speaker 10: proposition that the United States has the right to break 354 00:20:32,720 --> 00:20:36,399 Speaker 10: international law if it is enforcing its domestic law. And 355 00:20:36,440 --> 00:20:38,880 Speaker 10: that's another way of saying that the United States has 356 00:20:38,920 --> 00:20:41,840 Speaker 10: long looked at international law askew, because of course, the 357 00:20:41,920 --> 00:20:44,919 Speaker 10: United States is based on its constitutional law and cannot 358 00:20:44,960 --> 00:20:47,800 Speaker 10: supersede constitutional law. So we will do what we want 359 00:20:47,840 --> 00:20:49,880 Speaker 10: to do in the world. And as I say, Maduro 360 00:20:50,080 --> 00:20:51,720 Speaker 10: is and what a bad guy. So I think in 361 00:20:51,760 --> 00:20:53,640 Speaker 10: the short term it's a good thing that we did it. 362 00:20:54,280 --> 00:20:57,720 Speaker 10: Putin has tried to assassinate Zelenski more than once, and 363 00:20:57,760 --> 00:20:59,919 Speaker 10: I'm sure there are a few officials in tai Wa 364 00:21:00,160 --> 00:21:01,800 Speaker 10: that the Chinese would like to get their hands on, 365 00:21:02,520 --> 00:21:04,560 Speaker 10: and we could well have let the genie out of 366 00:21:04,560 --> 00:21:08,240 Speaker 10: the bottle. To your good question on this kidnapping of 367 00:21:08,280 --> 00:21:11,240 Speaker 10: foreign leaders as a new norm, I mean the caveat 368 00:21:11,280 --> 00:21:14,159 Speaker 10: again is that the United States can do it. We 369 00:21:14,320 --> 00:21:17,399 Speaker 10: just rolled over Chinese air defense systems and we have 370 00:21:17,440 --> 00:21:19,760 Speaker 10: the best intelligence and military in the world. So whether 371 00:21:19,600 --> 00:21:22,560 Speaker 10: other countries can do it is an open question, but 372 00:21:22,600 --> 00:21:24,600 Speaker 10: I think you're right to suggest that they may try. 373 00:21:25,440 --> 00:21:27,080 Speaker 4: How worried should Cuba bee? 374 00:21:27,200 --> 00:21:31,840 Speaker 2: Should Greenland be Columbia today? 375 00:21:32,080 --> 00:21:35,480 Speaker 10: Well, I mean my eyes are on Greenland. I've always 376 00:21:35,480 --> 00:21:37,720 Speaker 10: said to you guys that I think the President is 377 00:21:37,800 --> 00:21:41,720 Speaker 10: serious in his foreign policy declarations, and there is a 378 00:21:41,760 --> 00:21:46,119 Speaker 10: strategic sense, in some way, a strategic rationale for the 379 00:21:46,200 --> 00:21:50,359 Speaker 10: United States controlling Greenland because of the President rightly points 380 00:21:50,400 --> 00:21:53,359 Speaker 10: out there are Russian and Chinese incursions in that area, 381 00:21:53,400 --> 00:21:55,879 Speaker 10: and it's going to get more and more as climate 382 00:21:55,960 --> 00:21:59,600 Speaker 10: change continues. I think Mexico should probably have a think 383 00:21:59,640 --> 00:22:03,399 Speaker 10: about how many cartel members it's harboring. And as for Cuba, again, 384 00:22:03,720 --> 00:22:06,560 Speaker 10: we've long had a relationship that is adversarial with Cuba, 385 00:22:07,000 --> 00:22:10,600 Speaker 10: and I wouldn't myself be opposed to a similar operation there. 386 00:22:10,920 --> 00:22:13,119 Speaker 10: But of course you have to then, as you've pointed 387 00:22:13,119 --> 00:22:15,800 Speaker 10: out in these questions, start to wonder about what kind 388 00:22:15,800 --> 00:22:17,879 Speaker 10: of international environment you're introducing. 389 00:22:19,160 --> 00:22:23,840 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 390 00:22:24,040 --> 00:22:28,000 Speaker 1: and anywhere else you get your podcasts. 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